Denta Water IPO

Denta Water and Infra Solutions Limited, founded in 2016, specializes in water management and infrastructure solutions, with a particular focus on groundwater recharge projects. The company offers design, installation, and commissioning services for water management systems and also undertakes construction projects in railways and highways. Some of their key achievements include significant projects like the Byrapura and Hiremagaluru LIS Project, the Karagada LIS Project, and the first phase of the KC Valley wastewater treatment project in Bengaluru, as well as their contributions to the government’s Jal Jeevan Mission.

The company secures contracts through transparent competitive bidding processes by State and Central Governments, and also serves as a sub-contractor for various private parties. Denta Water actively participates in tenders for projects related to groundwater recharging, lift irrigation, and infrastructure for drinking water supply under initiatives like the Jal Jeevan Mission. Given the projected growth of the Indian water and wastewater treatment market, with an expected CAGR of 6.08% from FY 2023 to FY 2030, Denta Water is well-positioned to expand its influence and opportunities in the sector.

Denta Water IPO Strengths

• Denta Water has proven expertise in water management projects, focusing on groundwater recharging. For example, since incorporation, they have completed 27 water management infrastructure projects for the Government of Karnataka.
• They have an internal engineering team with core competencies in water treatment. However, they give out subcontracts for associated works in order to maintain an asset-light model.
• They are in a growth phase as they are looking to expand into other geographies such as Gujarat, Madhya Pradesh, Maharashtra and Uttar Pradesh to unearth additional opportunities beyond the confines of Karnataka.

Denta Water IPO Risks

• As of October 31, 2023, 69.68% of their order book is contributed by government clients. They rely heavily upon state governments, particularly the government of Karnataka and other entities like municipal corporations in the state of Karnataka. As a result, many of their projects are often subject to delays and other bureaucratic issues.
• Their revenue is generated from projects awarded to them occasionally via competitive bidding. The timing of awards for such projects is thus unpredictable and outside of their control.
• They do not have long-term agreements with their suppliers of construction materials. Any increase in the cost or decrease in supply in the availability of, such construction materials could have an adverse effect on their business and the results of operations.